Here’s something that never changes: People saying the channel is changing. They’re right. It’s been happening at a breakneck pace for at least my entire channel journey, which stretches back into the last millennium!
In nature, changes in the ecosystem cause organisms to adapt. This is no different within partner ecosystems. In our current climate, I contend that the most important adaptation a channel professional should undergo is one towards accounting and finance literacy. While channel roles have always asked for people with highly evolved relationship skills, they may not always ask for traditional “numbers” people.
Unfortunately, what’s been done in the past isn’t necessarily what still works. Today, the most successful channel leaders need to be good at building relationships and at delivering strategies backed by sound financial reporting. This starts by understanding how your channel metrics impact the company’s P&L (profit and loss statements).
If acronyms like P&L, COGS, and EBITA don’t come as easily to you as VAR and MSP do, you’re in luck. I’m speaking at the upcoming MSP Summit in Orlando, Florida. Come to my session for actionable insights into reading financial statements. From there, you can start on the path to making your CFO your BFF.
Ready to learn more about how brushing up on financial literacy matters more in the channel than it ever has before? It’s because…
It’s not “channel for channel sake,” but “channel for revenue’s sake.”
“Channel first!” has become a channel chief battle cry. Partners like hearing it but even they know that a channel program won’t last if it’s not the supplier’s most attractive go-to-market strategy. A combination of the profitability, scale, time-to-value, and risk status of a channel program needs to stand out from other routes to revenue. The most successful channel leaders will study and master financial reporting to win the hearts of CFO’s and partners alike. Demonstrating real Return on Investment (ROI) is music to a CFO’s heart. Successful channel chiefs focus on proving the value of the channel to the organization.
Private equity has taken an interest in the channel.
It’s a particularly active economic time for private equity firms, and we see big investments happening across many industries. Channel companies are no exception. There’s an abundance of PE-backed investment and M&A in tech companies with a strong indirect sales model, in both distributors and technology service brokerages as well as in channel tech companies. It’s important for channel leaders in companies seeking investment to understand what is attractive to private equity. Then, when private equity inquiry and investment arrives, channel leaders need to be able to answer tough questions about the profitability, sustainability, and scalability of channel revenue.
These skills lead to career advancement and flexibility.
Climbing the corporate ladder or reaching for roles outside one’s experience takes boardroom prowess. The best feedback I’ve received in my career was that my lack of accounting and financial literacy was holding me back. Imitating a deer-in-headlights when asked how changes in the channel program will affect COGS and SG&A isn’t a good look. All that to say, I had to adapt. I became what the ecosystem required. Acquiring the financial education I needed put me on the career path I desired. Simultaneously, I became a real asset to my employers, our customers, and the partners we work with.
Bottom line: admitting you have a gap and starting to fill it is the hardest part. If you’re interested in learning exactly how to do just that, please join me at MSP Summit for my session on “Building Your Channel Leadership Skill Set: How to Read and Understand a P&L.”
When? Tuesday, September 13
1:45 pm – 2:20 pm
Where? Caribbean Ballroom 1
